Diana Mey opened a new line of service with the AT&T Retail store. During the transaction, she was electronically presented with the AT&T Wireless Customer Agreement, to which she pressed “accept” using the on-screen button. By signing the acknowledgement, she electronically accepted AT&T’s Terms and Conditions which included regular mail, auto dialling, text messaging and other means to advise Mey on their available services. The wireless agreement also included an arbitration agreement which included a clause to arbitrate ‘all dispute and claims’ with AT&T Mobility and its affiliates.
In the year 2015, AT&T acquired DIRECTV, which does not provide cell phone services. In Dec 2017, Mey filed a lawsuit against DIRECTV and its hired agents, alleging that the company's agents made automated and pre-recorded telemarketing calls to her AT&T Mobility phone number earlier that year even though her phone number was on the National Do Not Call Registry. Mey sought class certification, statutory damages, and injunctive relief after alleging three counts of TCPA violations. Based on the arbitration provision in Mey's contract with her cell phone carrier, AT&T Mobility, LLC (“AT&T”), DIRECTV filed a motion to compel arbitration.
The District Court dismissed the request, which determined that the disagreement did not come within the terms of the agreement and that any alternative interpretation would be unconscionably wide. DIRECTV files an interlocutory appeal.
The United States Court of Appeals for the Fourth Circuit addressed the following issues:
- Whether an agreement was formed or not?
- If so, then what is the scope of the agreement?
JUDGEMENT AND ANALYSIS
As to the first issue, the court rejected Mey’s claim that she did not sign the arbitration agreement with AT&T, Mobility. Mey had signed an acknowledgement that she agreed to the arbitration provisions when she opened the new line of account. Court pointed out that this acceptance is enough to prove her acceptance to the agreement.
Mey then argues that, even if she has consented to the agreement, she did not conform to the arbitration agreement with DIRECTV. “AT&T and you agree to arbitrate all disputes and claims between us,” the arbitration agreement states. Later it clarifies that “you” and “us” in the contract includes the customer and the respective subsidiaries, affiliates, agents, employees, predecessors in interest successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of services or Devices under this or prior Agreements between us. DIRECTV claims to be an affiliate of AT&T, but Mey responds that ‘affiliate’ should be limited to the affiliates of AT&T Mobility at the time of execution of the arbitration agreement. The court notes terms ‘successors’ and ‘assigns’ whose identities won’t be known until some point in the future. Given the agreement's forward-looking nature, the court held that it's not very certain that the parties meant to limit the covered entities to those that existed when it was signed.
After confirming the formation of the agreement and if it includes DIRECTV as an affiliate, the court then looks into if the agreement would cover the dispute. Mey’s TCPA claims against DIRECTV and the district court’s judgment was considered. The majority believed that the district court used the incorrect standard, asking “whether the arbitration agreement might be read not to cover this dispute” rather than “whether the arbitration agreement is ‘susceptible of a construction that covers the alleged dispute,'” as precedent required. The Fourth Circuit acknowledged the absence of binding law on the subject of endless arbitration provisions, adding that neither party could cite a case in which an arbitration clause as wide as AT&T's covered "all disputes and claims between us." The majority decided that AT&T's indefinite arbitration clause was "susceptible of a construction that includes Mey's TCPA claims" because of the agreement's "extensive wording." Hence, the court adhering in favour of arbitration vacated and remanded the dispute to the District court.
By assuming the broadest language of the arbitration agreement, the majority judge acknowledges how the ‘absurd results’ could lead to troubling hypothetical scenarios. Dissenting opinion by Judge Pamela Harris expressed that, “no reasonable person procuring cell-phone service from AT&T Mobility . . . would understand ‘affiliate’ to include any and all future [and unidentifiable] corporate cousins.” The majority and dissenting opinion have reignited the age-old conflict between (1) the FAA's broad powers, resulting in resolving all disputes in favour of arbitration (2) contract principles, which require a mutual "meeting of the minds" as to the meaning of the arbitration clause.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.